Understanding Management accounting and Financial Management Essay

Understanding Management accounting and Financial Management - Essay ExampleUnderstanding Management accounting and Financial ManagementConsidering the gold cypher of Mowtown store, the trouble should be credited for the limited amount that is being paid as payroll as a wage. On the other hand, they stick been getting the efficient services from the employees of the store. Another main factor that needs to be considered by the direction is that they should look for the same policy reforms that affected their meshwork to rise with the highest percentage, i.e. the ending balance of February and May will indicate that. The managers moldiness also look for reducing the be such as shipping costs and maintenance costs. Budgeting and better direction last making and management control An impelling budgeting system will facilitate the management to make an effective finding making, which lead to the results that are expected by the management in the end of a period. Without a prop er budgeting and forecasting system, the management cannot predict or dissolve what steps must be taken to expand or at least maintain the business, what measures should be taken to reduce the overall costs, and how this framework must be established. An improper budgeting system will lead to a frustrated decision making process which might not be in favour of the management or a particular business.Budgets are prepared by the company operatives at various departmental levels whereas the master budget actually highlights the complete financial plan for a particular period. The main objectives of preparing a budget which can also be termed as the advantages can be explained as follows The budget must be prepared in order to direct the attention of the management to the future trends of the business, based on the results of the present trends and transactions. The budget actually affects the decision making process of the management and helps the system to reform the strategies and policies of the company. It allows the company management to critically analyze the activities running on in the business. The proper budget allows the management to predict the problems and issues as well as key opportunities that can be controlled or covered in the coming period. The budgeting enables the managers to achieve their objectives as well as important goals of the company more efficiently. A budget will remind the management about what objectives they have set and how they have to carry out those. An effective budget also helps the management in terms of performance evaluation. A budget leads to the management making authorized actions. As mentioned above, an effective budget helps the management process. In terms of this process, the first thing that needs to be considered is the planning period, which should be future-oriented. The proper planning is totally dependent upon the statistics of business, i.e. current financial situation, and about authorized proof for t hat is given by the budget to the management officials. An effective budgeting will also state the condition regarding the goals that have been set by the management in the beginning of the financial period, and whether the processes to meet these goals are being undertaken properly or not. This is